Exchange wagering approved by state horse racing board

Ed Zieralski

There was big news Thursday in horse racing, especially where the game pertains to betting, the multi-billion dollar engine that drives the sport.

The California Horse Racing Board approved rules at its meeting at Betfair Hollywood Park that will allow for exchange wagering in the state, as soon as early 2013. Exchange wagering gives gamblers the ability to bet against a horse, or to bet a horse will lose a race. The rules and regulations passed by the CHRB now will go to the state’s Office of Administrative Law for approval. There is expected to be legal challenges to exchange wagering. Owners and trainers have spoken out against the practice in the past.

Josh Rubinstein, the senior vice president of development for the Del Mar Thoroughbred Club, attended the meeting at Betfair Hollywood Park. He said the DMTC is in favor of the sport moving to exchange wagering.

“We (DMTC) are interested in looking at anything that helps horse racing and helps provide the first-class product that we put out at Del Mar,” Rubinstein said. “If exchange wagering is approved, we’ll look at it.”

As a way to expedite the process, the CHRB approved a provisional license application for Betfair-TVG to conduct exchange wagering.

“They granted a provisional license application for Betfair TVG assuming that the Office of Administrative Law approves the rules and regulations,” Rubinstein said. “They can’t approve a license if the rules and regs don’t allow for that wagering to occur. TVG Betfair will have the ability to conduct exchange wagering, but they need to find a willing partner in a racing association as well as the consent of a horsemen’s group like the Thoroughbred Owners of California. All those things need to happen, but this is a step in the right direction.”

Rubinstein described an example of exchange wagering.

“The easiest way I can describe it is take the Pacific Classic for example,” Rubinstein said of last year’s signature race at Del Mar that was won by Dullahan. “If I thought Game On Dude was going to win the Pacific Classic and you thought Game On Dude was not going to win the Pacific Classic, then the exchange operator would match us up. It would be in cyberspace, of course, but you would have all the other horses in the field, and I’d have Game On Dude. You would have won because Game On Dude didn’t win. If one person is backing the horse and thinks it’s going to win, and that’s how betting at the track is right now, then he bets on a horse to win. But the second piece, the exchange wagering, allows you to lay a horse, or get the rest of the field against that horse.”

Trainers like John Sadler have spoken out against exchange wagering. They feel there is a possibility for tainted races or inside cheating in the game.

“We want to take our time and due diligence on it,” Rubinstein said. “It is a new form of wagering. But it’s being used in Europe, places like the UK, Ireland, France. It is something that is popular overseas. Anything that grows the sport or brings new revenue into the sport, we’re interested in it.”

The state legislature approved exchange wagering in 2010, pending the development of rules by the racing board. Betfair-TVG and Twinspires.com applied for provisional licenses, but Betfair-TVG was the only one chosen. Twinspires.com likely will apply for a provisional license later.

There is a cost involved, but the state legislature stipulated in 2010 that the company winning the bid to conduct exchange wagering must cover the costs, estimated at more than half a million dollars to pay for computer hardware, software and staff training. Betfair-Hollywood said it would take a few months to set up for exchange wagering.